Saturday, March 17, 2007

Stupid Happens!!!

New sample of someone sipping from the Stupid cup...

“Irene Pena is buying her first home, a three-bedroom house in San Pablo priced at about $500,000. She was scheduled to get the keys to her house this week, but instead she learned 10 days ago that her loan had fallen through because the lender changed its criteria.”

“Pena’s seeking 100 percent financing using a combination of a first and second mortgage, and applied for the loans using a ’stated income’ process, because she cannot document her full income using pay stubs or W2 forms.”

“Her real estate agent, Gema Smith in San Jose, said Pena’s credit score is very good, but the lender denied the loan at the last minute because Pena works for a janitorial service and cleans houses as a side job. Smith said lenders are suddenly balking at making loans to workers who can’t easily document their income, even when they have good credit scores. Two other adults in her household will be contributing to the mortgage, but they lack income documents, too.”

Unbelievable that someone with a doctorate in education probably spent more time researching the digital camera and flat screen tv he bought than he did when showing up to the housing bubble with a bucket of money and a big box of stupid.

“Unlike many borrowers who took out subprime loans, Andy Sobel had good credit, a decent job and modest savings, but he needed to stretch to buy a home in the white-hot San Diego housing market in 2004.”

“Three years later, Sobel has lost his home and his savings, and he faces a big tax bill as a consequence of a failed subprime mortgage held by Countrywide Financial Corp. he says he should never have been written.”

“He knew payments on the loan could rise, but was told he could refinance. His broker advised him to take out a negative amortization loan that would add $300 each month to his principal and ‘ride it out for a few years’ until the market recovered.”

“‘I said, ‘Are you crazy?’ I started really worrying,’ he said.”

“For Sobel, the banks began foreclosure proceedings in December. Both lenders have agreed to allow Sobel to sell the condo at a loss of $60,000, on which he has to pay taxes.”

“‘You never think that this could happen to you. You feel like an idiot,’ said Sobel, who has a doctorate in education. ‘You fall down and they stab you.’”

10 Comments:

simple math skills are far beyond most of those with a doctorate in education,the fact that mr sobel can actually speak coherent english is astounding to me.my experience with those in academia has been educational,the unlimited appetite for chickenshit,and the completely unprincipled viciousness neccessary for advancement makes the coorporate world look sweet.

and the completely unprincipled viciousness neccessary for advancement makes the coorporate world look sweet.

I can vouch for that. I hold a Ph.D. in a bio/psych science, worked at Harvard for a while, then left academia for the very reasons you mention. The corporate world is way more relaxed vis advancement.

Stay tuned... I will use this thread as the place to find FB stories- we will just keep posting anecdotal stories here. Please contribute and send in your stories and share them in the comments. I will put a link to this post on the sidebar so we can find it without searching the archives.

You know, I have a lot of trouble feeling sorry for folks who KNEW it was going to go up and believed "I can just refinance and it will all be okay." Yes, I'm sorry this guy is going to have a very bad time. However, his name is on the dotted line saying he understood what he was getting into.

never before in history have we had speculation fueled by toxic funny money loans on this scale. The only other time that we an relate in similarity was just before the great depression. Previously that had been known as the largest margin call in history. We have surpassed that now.

Historically when referring to a scale of buyer vs. seller market prices were still more in line with the fundamentals of the economy, wages, job growth etc... there was some relationship between price and real income and potential. Sometimes there was a lag, and the numbers didn't always align depending on where we were in time... wars, population migrations, industry growth, expansion and collapse. But all in all never before have prices been so disconnected from the fundamental numbers that make up the economy.

So no... the 6 months = buyers market does not apply anymore here.

It will not be a buyer's market until the prices are more affordable for the potential buyers. As long as median price is 10x the median household income you are not anywhere near a buyer market.

Athena,while you are a bit longwinded about it,you are right.a buyers market in sonoma county will be when the price of a tract home in a stable neighborhood sells for 125xmonthly rent instead of 500x.or 3x median income buys the median home,we have a long way to go,and may see 5 years or more inventory at some point.the basic economics of housing are going to be brutally clear pdq.

“Her real estate agent, Gema Smith in San Jose, said ... lenders are suddenly balking at making loans to workers who can’t easily document their income, even when they have good credit scores. Two other adults in her household will be contributing to the mortgage, but they lack income documents, too.”